Limited downside in markets provided inflation remains in check: Analysts

Peaking of inflation, analysts believe, could put a cap on bond yields and a floor on equity valuations

After a fall of nearly 5 per cent thus far in calendar year 2022 (CY22) on account of domestic and global headwinds, analysts now see limited downside for the markets provided inflation remains in check. On the contrary, those at Kotak Institutional Equities (KIE) expect a modest bounce from the current levels over the next few months if inflation data was to be in line with market expectations.

“The Indian market may have limited downside and even moderate potential upside over the next few months if